My Top Stock Pick for Big Gains in 2025
Here's a biopharma company that should grow nicely into the new year with less chance of blowing up than some speculative small-caps.
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Depending on your goals, there are several ways to approach choosing a top stock for the year ahead. If you want to pick a stock with the potential for the biggest gain, you should pick a very high-risk, lower-priced stock. If you pick the right stock, the potential for a 100% return or more is quite good.
If you aim for an above-average gain, but with limited risk, then you should pick a bigger cap name like Amazon AMZN or Netflix NFLX that isn't going to totally blow up if it has some disappointments. The mega-cap stocks aren't likely to produce giant gains, but they have a good shot at decent gains with less risk of a major loss.
My approach to this challenge is to focus on the risk/return ratio. I want a stock with the potential for a huge gain, but without a ridiculous amount of risk. Most big-cap names have very little chance of doubling, but a smaller stock with some potential catalysts might.
Given this, my top stock pick for big gains in the year ahead is Rocket Pharmaceuticals RCKT.
Rocket Pharmaceuticals is a biotechnology company that develops genetic therapies for rare and complex disorders. Gene therapy is a medical approach that aims to treat or prevent diseases by modifying a person's genes. It involves introducing healthy genes into cells to replace or correct defective genes that are responsible for certain genetic disorders.
Rocket is using innovative science to create gene therapy cures for rare diseases. The company has five potentially best- and first-in-class curative gene therapies in clinic studies for fatal rare diseases with no approved therapies.
Current clinical programs include therapies for Pyruvate Kinase Deficiency (PKD), a rare red blood cell disorder that can lead to anemia; Danon Disease, a metabolic disease that typically damages the heart, retina, muscles and brain; Fanconi Anemia, which is a genetic disease that can lead to bone marrow failure and potentially cancer; Leukocyte Adhesion Deficiency-I (LAD-I), which is severe pediatric genetic disorder that causes recurrent and life-threatening infections; and Infantile Malignant Osteopetrosis, which is a bone marrow-derived disorder.
The big catalyst in 2025 is likely to be RP-A501 for Danon heart disease. There have already been strong indications that this gene therapy works, and there is a very high likelihood of a positive outcome. Danon is a terrible disease, and the only potential cure currently is a heart transplant.
On Monday morning, Wedbush initiated coverage on Rocket with an "Outperform" rating and a $32 price target. The analyst believes 2025 "should be an inflection year" for Rocket, with multiple clinical and regulatory catalysts "potentially creating strong momentum" with the shares trading near 52-week lows. He states that Rocket's RP-A501 for Danon disease has the potential to be a $1 billion commercial opportunity.
The analyst also believes that there is potential for an accelerated approval pathway for RP-A601 in arrhythmogenic cardiomyopathy caused by mutations in the PKP2 gene. The initial Phase 1 data should be out in the first half of 2025.
Wedbush is not the only analyst who is bullish on the stock. There are 12 buy ratings, with an average target price of $46.36. The high target is $65, and the low is $29, compared to the current price of around $11.75.
The company recently conducted a spot secondary offering of 13.2 million shares at $12.50. There was strong demand for the offering, but the stock has remained under pressure, likely due to tax loss selling. That pressure should be coming to an end, creating a strong entry point.
I expect the stock to be quite volatile and will be aggressively trading it, but even at the lowest target price, it has a very good shot at doubling this year.
At the time of publication, DePorre was long RCKT.
